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U.S. Steel closing steelmaking operations at Hamilton plant

CEO Mario Longhi told investors Tuesday the iron and steelmaking operations at the old Stelco plant will be permanently shut down on Dec. 31, ending more than a century of steel production at the plant.

U.S. Steel Corp. will permanently shut down the iron and steelmaking operations at Hamilton Works on Dec. 31. Company president and chief executive Mario Longhi made the comments regarding the former Stelco operations during a conference call with analysts on Tuesday afternoon.
CANADIAN PRESS

Published on Tue Oct 29 2013

The hopes that Hamilton’s U.S. Steel blast furnaces would fire up again have burned out, along with more than a century of steel production at the plant.

U.S. Steel’s announcement Tuesday that it will permanently close its iron and steelmaking operations in Hamilton at the end of the year has been feared since the
company idled the mills in October 201
0.

The final blow came when CEO Mario Longhi told investors Tuesday the iron and steelmaking operations at the old Stelco plant will wrap up Dec. 31. “Decisions like this are always difficult, but they are necessary to improve the cost structure of our Canadian operations,” he said.

Tuesday’s announcement does not affect other operations at the plant, including rolling, coating and finishing, along with coke making, according to the Pittsburgh-based company.

There will be a loss of 47 non-union jobs, but company spokesperson Courtney Boone said it would try to move staff into other positions. That leaves approximately 600 members of Local 1005 Steelworkers and about 228 salaried positions at the Hamilton plant.

Hamilton Mayor Bob Bratina called the end of steelmaking at the company his “worst fears come true,” but added it’s important to note the company’s current operations remain unaffected.

Rolf Gerstenberger, president of Local 1005, said he always hoped the plant’s steelmaking would restart, but he was not surprised by the move. “It’s more of the finality of it, that you are written off . . . You guys aren’t making steel here any more.”

Steel analyst Chuck Bradford said the move was inevitable all along. He says because the former Hilton Works lacks a hot strip mill, the only thing it could produce was semi-finished steel, and “there is no market for that product at all.”

Provincial Minister of Economic Development Eric Hoskins declared Premier Kathleen Wynne’s government “disappointed,” but said “we will continue to work proactively with Ontario’s steel sector to spur innovation, attract investment and create jobs.”

Local NDP MPP Paul Miller says U.S. Steel has not lived up to commitments made to the federal government to maintain jobs when it bought Stelco in 2007. “The promises made for Hamilton fell off the rail line really quick.”

While U.S. Steel’s decision doesn’t mean heavy job losses, Miller noted that many suppliers of material to the iron and steelmaking operations will be hurt.

Hamilton Conservative MP David Sweet said he had a brief meeting with the Canadian Steel Producers Association earlier Tuesday — before the U.S. Steel news broke — and said “it’s always about how highly competitive and difficult the steel industry is globally.”

Made in Hamilton: A short history of steel-making

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Click on the image to see a timeline.

In Ottawa, Industry Minister James Moore’s office said that the government does not get involved in any company’s day-to-day decisions. Jessica Fletcher, Moore’s communications director, also said that “the government’s settlement with U.S. Steel contains commitments which provide economic benefit for Canada.”

On Monday, U.S. Steel reported a third-quarter loss of $1.79 billion (U.S.) or $12.38 (U.S.) per share due to a big impairment charge on the value of its steel-making operations.

In 2007, when the steel giant got federal approval to buy long-struggling Stelco, U.S. Steel made specific promises, including that it would employ an average of 3,105 workers for three years and would produce more than 13 million tons of steel in the period ending Oct. 31, 2010.

Beginning in March 2009, however, the company shut down most of its Canadian operations, claiming demand for steel had collapsed; it also locked out workers in Hamilton and Nanticoke to enforce demands for radical changes in pension plans. The company said the 2007 agreement allowed it to make cuts to meet changes in market conditions.

The government took the company to court, seeking to force the company to meet its jobs and production promises. But in 2011, it settled with U.S. Steel in an agreement in which the company promised to keep producing steel in Canada for at least four years.

U.S. Steel said it will take a non-cash charge in its fourth quarter of approximately $225 million related to idling operations in Hamilton. On Monday, the company reported a third-quarter loss of $1.79 billion (U.S.) or $12.38 per share due to a big impairment charge on the value of its steelmaking operations.

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